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tv   Worldwide Exchange  CNBC  October 31, 2014 5:00am-6:01am EDT

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it's friday and it's heal low wean. happy halloween, everyone. welcome to social security social security. i'm seema mody. and i'm wilfred frost. >> no blad on wall street this week. >> the world's largest beermaker loses its fizz in the third kwarder. inbev loses expectations in all of its core markets. it's back in the black with
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bnp paribas. the cfo tells cnbc he believes the stress tests were credible. >> i think it's really a hotel exercise that can help with overweighted european banks. it leaves bnp paribas well capitalized. >> never say never. novatny says in an exclusive interview he does not think qe should be on the table now, but leaves his options open. >> you should never say never. i do not fear this perspective. display you're watching "worldwide exchange," bringing you business news from around the globe. and on this friday morning, let's take a look at u.s.
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futures. it was a strong performance for u.s. markets yesterday thanks to visa, which helped power the dow putting tin decks within 155 points of a record high. talk about a come back. the dow trading higher in premarket trade. the s&p 500 trading back above 2000 in premarket. it will be interesting to see how markets close the month of october. european markets sharply higher, as well, ahead of key inflation daddy we will get in about one hour's time. right now, the xetra dax, up triple digits. up 1.7% despite inflation in germany unexpectedly coming in at 0.7% for the month of october. as traders take a more risk on approach to trading, you have been moving lower as we've been seeing the flow of capital into equities in response. we're looking at the ten-year treasury trading at 2.3%.
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the ten-year bund right now at 0.84%. wilfred. >> thanks, seema. the other massive story this morning, the nikkei has rallied to a seven-year high after the bank of japan unexpectedly increased its asset purchase program for the first time in 18 months. the central bank will now expand its balance sheet by 80 trillion a year. the monetary policy board was split on the decision which comes as abe's 2% target looks increasingly out of reach. joining us now, anasal. this move, is it part of the plan or does it strike you as a note of desperation? >> no, i think it's not just part of the bigger plan. it's a huge amplification of the bigger plan that we're seeing by central banks around the world
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with possibility the notable exception of the ecb. perhaps we'll talk about that later. bur what is really important about this is that people were waiting for some kind of shock and awe from europe and instead we've got it from japan. and i think this shows, actually, how much impact -- actually, not huge change in central bank policy in europe or japan can have on those very stagnant economies. so i think it is a very positive move. permanent personally, i'm still quite bearish about japan because the other thing that's going to happen in japan is a tax increase. to some extent, i think what the boj is doing is preparing the ground in terms of stock market behavior and public reactions for a tightening of fiscal
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policy and other tax hikes because there were some concerns in japan which were desperate to put up taxes that markets are weak and this pressure to delay the tax increase. >> is it trying to create motivation? >> in a per verse way, i think some people even in the bank of japan welcome. now, i think the real effect is that there's a panic in my view an excessive panic in the japanese government about the size of the budget deficits they've been running for years and years now as we've seen from the u.s. figures that kiem out this week. actually, the best thing to do about budget deficits in a situation of world recession is simply ignore them, let them look after themselves. the deficit is big enough to look after itself and i think that should be the policy, that has been the policy in the u.s.
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successfully. but the japanese have decided to tighten, to raise taxes, and the only way to offset that has been through the central bank action and at least we're finally seeing some dramatic central bank action in japan. >> absolutely. u.s. markets did get a boost yesterday with the dow closing up more than 200 points, erasing all of october's losses. the major indices are now on pace to close out for the month. the marketable recovery for the u.s. markets and the fed ending quantitative easing. the focus now will shift towards the u.s. economy. and if it can continue to strengthen without the support of the fed. but my question is, if the data over the next couple of weeks comes in weaker than expected, does that perhaps tell us and tell investors than the economy cannot continue to improve without the bank's support? >> i think if it comes in weaker than expected, expectations will
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be almost disappointed by definition. but i would actually, seema, agree with the first part of your comments. the strength of the markets in the last couple of days, which looks like now it's going to carry through, suggests quantitative easing, at least in the u.s., was not the only or even perhaps the main ingredient behind the recovery of the economy and the recovery of financial consequence and investment and so on. the u.s., i think, has now reached the escape velocity that have all been waiting fort over the last few years. so i think there's a pretty good chance that the decision to end qe will turn out to be the right one. and will not do any damage to the economy. if suddenly we hit another soft patch like the one last winter, if the temperatures go down by 15 degrees below normal and so on, we could all be surprised. but the most likely outcome, i think, is that the fed and the markets are now moving in
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parallel and in a contractive direction. >> if that's the case, if markets are responding to fundamentals, why are bond yields still so low? >> that's a great question. that's been the big puzzle and the big surprise, i'd say, of 2014 has not been the sprentren of the stock markets, but the strength of the bond markets. especially in the euro, which has been doing pretty well. in my view, at least part of that is down to the weakness not in the u.s. next year, but in the weakness in europe and japan this year. europe and japan crucially until at least yesterday have really surprised on the downside. in the summer, there was really a -- a recession in the european economy and the japanese economy at a least in real terms has not pulled out of its long-term depression anything like the way expected. so that i think has been
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exercising a downward effect. i think the tale of the week, european and japanese economies have been wagging the dog of the u.s. bond markets. >> anatoll, thank you very much for now. moving on to some individual stocks, citigroup has revised down its third quarter net income from $2.8 billion to $3.4 billion. the bank was forced to set aside an extra $6 million to cover legal expenses in the third quarter due to what it called rapadely regulatory inquiries. standard chartered is trading at a 5 1/2 years low following news u.s. authorities reopened an investigation into whether the bank broke sanctions against iran. rbs is taking a litigation hit. the uk bank set aside 400 million for forex and insurance probes. but the lender said it's on track to meet cost cut targets. meanwhile, revenue res mixed despite a 3.9% rise from the
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same period last year. earlier on cnbc, we spoke to the cfo of bnp paribas and asked him about the eks of clearing and if the banks have found a partner to do i tell on their behalf. >> part of the u.s. settle, there is a relegation plan. that contains many things and runs over several quarters, deep into 2016. actually, the main thing of it is that all the transactions, which is the end process which, for example, a client of bnp paribas would go to a client of another bank, those activities in the future will all have to be done through bnp paribas. so those ee visions today that doesn't happen and those we have to on board. >> in other news, credit suisse earmarking 390 million swiss francs, the litigation provisions this morning. the company outlined its third quarterly results after last
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week's initial release. i would love to get your thoughts on the health of the european banking system and as well as on they charges. do you think regulation has gone too far? >> well, i think the charges have certainly gone too far for an economy that defines the enormous litigation settlements have certainly gone too far. especially i would say in europe for an economy that desperately needs to revise bank lending. the eurozone is now clearly the weaker start of the economy. it's falling to follow through on the u.s. and the british example of fiscal and monetary easing and, really, their only hope is that the banks will start lending, will start transferring the funds that the ecb is willing to provide for them to the real economy. now, they did this asset quality review last weekend, the stress tests. in principal, they've rebuilt the capital of all but 25 or 13,
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whichever way you want to look at it, the european banks. so the european banks should be in a position to lend. but if you keep hitting them with these litigation settlements and these fines, you're capitally taking two steps forward, perhaps one or maybe two steps back, and you're not getting anywhere. which isn't to say criminality or bad unethical behavior in banking should be count nanced, or should be ignored. but you have to look at the individuals who are causing it, not the institution. when barngss are fined $800 million, it doesn't hurt the people making the decisions, it hurts the shareholders who probably weren't even shareholders five or six or seven years ago when they offenses were happening.
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it has been upside down over the last three or five years and has to be revised. >> if we look at earnings season, markets were driven by multiple expansion. are we annoy seeing strong enough earnings to justify those multiples? >> well, the earnings, the figures that i've seen have been sdeept. it's about 8% of year on year increase in the s&p earnings compared with expectations even a month or two ago. they are beginning to perform well well on the upside. 8% earnings growth is sufficient to justify the kind of market behavior we're seeing. you know, the bullish behavior. i think the big worry is that earnings are still rising much faster than revenues. what would be encouraging would be to see revenues growth by the bank at 6%, 7%, 8% rates.
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>> and out of all of that, how is that factored into earnings at all? do you think that's a deflationary threat? especially if it continues to dip below $80 a barrel? >> well, it's a good question about the effect of earnings. probably the first round of effect on aggregate earnings is negative because it's hitting the earnings of energy companies which are significant. are over two, three, four quarters. i think it's bound to be positive. and no, i don't think that our deflation from oil is -- from falling oil prices is damaging or a worrying phenomenon in the same way for polling deflation. there is good deflation, bad deflation. this definitely good deflation. >> anatol stays where you say until after the break. what do watch on this trading day? we'll get the latest data on personal income, employment cost index, chicago pmi and consumer sentiment. before the bell, we'll get
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earnings support from chevron, exxon, clorox and msg. still to come, exxon closes out a busy week for big oil earnings. how is the sector bracing for lower prices? we discuss. and mobile iron performance better than expected in its third quarter release. we speak exclusively to the ceo live from san francisco. and with just days to go before the midterm electrics, we ask if the republicans will take control of the senate and what it means for president obama's economic agenda. we have an all-star panel ready to debate that coming next on "worldwide exchange."
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u.s. markets are posed to erase all of october's losses with futures set to a strong open. the bank of japan unexpectedly boosts the stimulus program. and a bitter taste for starbucks after disaointing the street on u.s. sales sending shares lower after hours. the european central bank says it will start buying asset backed securities from november and has asked four major managers to support its efforts.
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would the central bank be willing to buy corporate bonds as part of its asset purchase theme? >> i know this is a discussion in the markets. but my personal opinion is which have started some new programs, i think we should take some time to look at the effects we will have at the end of this year a new tranche of this targeted ltros. so let's see what is the uptake in this field. i do not think that we should be pushed by the markets to produce new program at every meeting we have. so i am for a steady hand approach. >> in the five-year inflation expectations to sell below, i think, the threshold of 190 and the reports came out that the ecb might eventually buy into
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corporate bonds, at the same time, also, the old story of fallen qe came back. so would you exclude that the central bank might move eventually into full on qe? >> this is -- can we exclude something. i think in life we never should say never, but i do not see some perspective at this time for this. >> still with us is anatoll. does the action today by the bank of japan mean the ecb has to act next week? >> i think the ecb has to act next week, but it doesn't mean that it will act next week. certainly if the ecb were run by people like knnovatny, there wod be no chance. it's disastrous, it's wide,
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europe is where it is. it's why the ecb has continuously failed, i mean absolutely failed to meet all its own targets. so this is one of the most dramatic failures since to 08. the one thing that has been the saving grace for the ecb has been the weakness of the euro. the euro is up by 3% just in the last 24 of 48 hours. and the euro/yen exchange rate, in that sense, i think it is helpful that japan is out putting more pressure on the ecb. clearly, there is still a lot of resistance from people like novatny and people at the bundes bank against any significant action.
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shares were down a tie up with italy's, quote, oldest bank was impossible. >> and before we go to break, in celebration of halloween, we want to know was been your most successful costume? tweet us your pic. here are a few of our own. we'll start with wilfred who loves to get dressed up. are you wearing eye liner there, wilfred? >> no eye liner. i had -- that was last year's costume. what about you, seema? >> i had very limited options in pulling up some pictures. but here are a couple of my own. this is -- i was right there a cute kid, i guess. i don't know what i was exactly wearing. this would be from college. pocahontas. >> very good. i like that one. >> are you celebrating tonight? >> no, tomorrow night.
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phantom of the opera. but we want to hear from you. what are your best costumes and what are you planning on dressing up as this year? get in touch with us. worldwide@cnbc.com or via twitter @cnbcwex. how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
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let's talk earnings.
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conco philips and royal dutch shell beat specations in the third quarter. ceo highlighted the importance of capital control and conco philips is the first of the majors planning on cutting spending. we find out if other oil giants, exxon mobil and chevron will follow suit when they post quarterly results today before the open. joining us now to discuss john stephenson, president and ceo of stephenson capital management. john, thanks for your time. there's so much focus on the oil sector right now and how these oil giants like exxon mobil and chevron will react to the recent volatility in the price of oil. what are you expecting today? >> well, what i'm speccing is them to announce some curtailment of capital plans. i think that's the low hanging flute. i think that's what royal dutch shell cfo hinted at. that was appear area they were looking at cutting back. they have plans to eventually divest of $15 billion in assets by the end of next year. >> john, let's talk about that capital control that seema just
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mentioned. one of the big companies that hasn't been doing it as much as the others is chevron. do you expect that that is going to hurt its share price in this world of fiscal consolidation? >> yes, i do, actually. they're the lowest of the majors. they're spending a lot of money on lss & projects particularly out of australia. they have vemths room in order to meet some of their targets. they've talked those targets down, but still, it will be an issue and they typically trade at a premium. >> john, thanks so much for joining us, stephenson and company capital asset management. >> as we head to a break, take a look at futures ahead of friday's open.
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welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. a very happy halloween. these are your headlines from around the world. let's start with japan. no blood on the streets for halloween. european stocks rally after a surprise announcement from the bank of japan pushing the nikkei to a seven-year high. the u.s. bank reduces its third quarter net income on ads 600 million legal charge. the world's biggest beermaker loses its fizz in the third quarter. the owner of budweiser amm inbev
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loses expectations. >> u.s. quarters disappoint the streets with starbucks sending shares lower after hours. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> it may be halloween, but no blood on wall street. right now, futures indicating a higher open. the dow jones industrial up about 180 points in premarket trade. definitely implying a higher open for wall street. of course, this following yesterday's rally on that better than expected u.s. gdp number as well as strong earnings. now close to hitting its intraday high, about 105 points hitting that level. european markets are higher today thanks to data we got out today.
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that will be in focus, we're looking at the german markets, up to the biggest 1.6%. just to give you some perspecti perspective, though, of where we stand, the german dax now not in correction territories, only down about 9% from its recent highs. german inflation unexpectedly fell in the month of october raising fears of deflation. as i said, today, we would get that eurozone cpi number. that would be in focus. >> thanks, seema. let's take a look at today's other top stories. the u.s. lender revise down its third quarter net income to $2.8 billion from $3.4 billion. an extra $600 million to cover legal expenses for what it calls rapidly evolving regulatory inquiries. city confirmed the subject of the foreign exchange market pros, it's one of six lenders expected to settle with the uk financial authorities over allegations of market manipulation. let's talk social media.
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lingedin beating expectations with better than expected revenue, a bump up of hiring expansion into china helped the social media site deliver a strong third quarter. earnings expectations for the current quarter were moved to below estimates. shares in frankfurt, up about 7.3%. investors responding positively to linkedin's earnings. shares in the world's biggest brewery, ab inbev have dropped to the bottom of the belgium market. the u.s. had a follow in sales where wholesalers cut veptory in the period. overall, they fell to a weakness in its other core markets, mexico and brazil. sony reported a loss of 136 billion yen in the july to september quarter due to its struggling smartphone business. the electronicmaker cfo says the company is cutting its smartphone sales outlook for
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fiscal year 2014 and '15 as it plans to shrink its business in china. however, strong playstation sales, the quarterly loss was narrower than expectations. the smartphone space has been a highly competitive business with apple and samsung dominating that quarter. >> absolutely. for sony, that move in the yen today, will that help their bottom line coming forward? >> absolutely. >> now, campaigning is well under way in the u.s. ahead of next week's elections. senate democrats are on the defensive. the gop only needs to take six seats to seal the democrats. nancy holbrook, she asked how confidence larry was that the republicans could gain control of the u.s. senate. take a listen. >> we think there's a two out of three chance that the republicans will manage to win. it's not a slam dunk.
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they could end up with 52, 53, 54 senate seats. but the reason people are reserving the possibility of, say, a biden majority, that is a 50/50 tie in the senate with vice president biden breaking the tie in favor of the democrats is because there are nine super close senate races, that it would spin the margin of error or even dead ties. so the assumption is that since republicans have more ways to get to 51 than democrats have to get to 50, they only need 50 besides president biden, we assume republicans will be able to pick up at least the 51 they need to control the senate. >> and the midterm elections fastly approaching. joining us now to discuss is james, a cnbc contributor as well as ben white chief economic correspondent from politico. let's talk about the midterm election. there's so much focus on what
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will happen next week if the republicans win the house, as many are expecting how much of a promotion doesn't give mitch mcconnell of kentucky. i was reading one blog that said he would be seen as more powerful than the president. ben, what do you think? >> i don't know if he's more powerful than the president in that scenario. but he can get stuff to the president's desk, probably. although he won't have a filibuster majority if republicans take the senate. but he can hopefully get immigration reform to the president. he's going to attempt to force the president to veto legislation that might be popular with the american public and that might be good for markets and the american economy. so it would put him in a much more powerful position than he is now. >> and, james, several topics dominating the midterm elections as they approach november 4th. isis, obamacare, immigration, but what do you think is the one issue or event that is taking center stage right now? >> i think the one thing that's
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been dominating election is the fact that the president has a low approval rating. two-thirds, 07% of americans think the country is on the wrong track. we have an unpopular president and a good chunk of the american people think the american dream is slipping away from them. that's a recipe for change. you have about a 70% chance the republicans take the senate. it wouldn't shock me if they got eight or nine, and it wouldn't shock me in if they didn't take it. i think it's far more likely that they will. which sets up a next term where you're going to get a lot of legislation on the president's desk. he hasn't gotten a lot of legislation to his desk because of harry reid. the question is, are you going to get any big compromises? are you going to get a presidential pivot to the center? will we see more action in the last two years than the previous two years?
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>> ben, not the biggest on the table was as we were just saying. would you say u.s. politics is more polarized than it has been for the last few decades? >> t. >> as soon as we get into 2015, republicans looking to run in 2016 are going to get in the way of some of this stuff, particularly on immigration reform where there's a centers that wants to get something done. corporate tax reform is one issue where there can be a centrist movement on that. once we get past this lekdz and republics take the senate, they're going to have a hard time keeping it in two years. a lot are elected in the 2010
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tea party wave up for re-election in 2016 in places like ohio, florida, illinois, states that are lead democrat and that voted for president obama. they may feel pressure to get some legislation down to show some accomplishmented when they run in 2016. but there's no question this is not going to be the kind of election that clarifies everything and puts one party clearly in charged. it will be a relatively mixed result and i think we'll see more polarization continue. >> according to a study i've read, the combination of a democratic president with a republican congress resulted on average with a return of 21% for the stock markets. perhaps for the gridlock is not as big of an issue as we suspect. >> thank you 190s. the 1990s skews all those results. we had a democratic president and a republican congress, which is great if you get something. the old saying, gridlock is good. i don't think gridlock is good
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any more. we want action on these issues, particularly corporate tax reform, get more on immigration, more entitlement debts coming in the next five, ten years, it would be great to get some entitlement reform. unfortunately, i think there is going to be more gridlock, maybe some executive actions by the president as they look towards 2016. >> november 4th will likely begin early and end late. gentlemen, we will leave it there. james pethokoukis and ben white, chief economic correspondent at politico. how ironclad is the security on your smartphone? we speak to the ceo of mobile iron exclusively on cnbc next. . i don't have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps.com you can print real u.s. postage for all your letters and packages. i have exactly the amount of postage i need,
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a picture-perfect earnings report? gopro reported better than expected quarterly earnings and revenue. it issued strong guidance. gopro issued guidance of $550 million to $580 million which came in higher than analyst estimates. gopro which makes those very cool personal cameras went public in june. the stock is up roughly 120%. but you've got to take into can, there are some bears out there.
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analysts at oppenheimer are projecting rates to decelerate rapidly in 2015 and 2016. something to keep in mind. >> 120% year-to-date performance despite the recent pullback. an important holiday season coming up for go pro, one stock where the holiday season is less than important is starbucks, big news from the coffee chain out yesterday. cnbc's kate rogers has more on the story. >> hey, wilfred. that's right. coffee, tea and latte lovers, listen.. howard schultz is saying the coffee retailer is planning to launch a food and beverage delivery service in some markets. delivery will be available to starbuck's loyalty process. the app will launch in portland, oregon, next month and nationwide next year. schultz said imagine the ability to create standing order of starbucks delivered hot to your desk daily. that's our version of immerse on
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steroids. now, investors were still guy guesting the company's news of weak sales at established u.s. branches. sales rose 5% in the americas, consensus expectations for a rise above 6%. starbuck's fiscal net quarter in at 77 cents a share. back to you guys. >> kate, thank you very much. let's talk about specifically the mobile device management space. mobile iron raised its fourth rt kwaer outlook as fourth quarter earnings came in better than expected. revenue rose year on year to $34.99 million. we appreciate you joining us early in the morning from california, bob. earnings came in hire than expectedati expectedations. what helped your company beat
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estimates this time around? >> mobile iron is fortunately to be leading a fast growing company. mobile iron is fortunate to be executing well in that segment. you mentioned our top line revenue growth. we also reported top line billings growth of 47% year over year and improved operating margines and cash flows quarter to quarter. i think that on a back drop as to where any other enterprise software companies are struggling. i think the reason why we're experiencing the success we are is that enterprise mobility is a large secular tail wing. if you look inside every workplace, every office, smartphones, tablets, mobile applications are really growing. and enterprise data is going everywhere.
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every company around the world needs to make their their enterprise data is secure. >> competition is high with the likes of blackberry, as well as good technology. do you think good competition will even to your earnings going forward? >> actually, we've seen the opposite. we've seen the competitive landscape narrow. as capital requirements have expanded, what we've really seen is that, you know, a couple of years ago where there was 1 thoun or 2,000 players in the stakes was down to three or four players. now i would say it's us and vm ware. >> at the moment, your revenue beat on expectations and subscriptions are up, but the bottom line still failing to impress. is that because you're desperate to get market share before the bigger players that have
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traditional software hit back and make e-mail secure without the extra protection that you might offer? >> i'm glad you asked that question. so in the last three years, mobile iron grew from zero to over 7,500 customers would bought our software around the world. and our focus is on medium and large sized enterprise customers. we have over 4,000 of the mobile iron customers. we have many of the large pharmaceutical companies, many of the large auto manufacturers, many of the large banks, many government institutions. and the reason why i share that information is that in the large endser price segment, we run what's called the land and expand business model. customers start with enterprise mobility, it might be 500 seats, 5,000 seats, but then they expand over time. and if you look at, for instance, we tracked our 2010 cohort of customers, and watched
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them over the last four years. they've groan 7.5x over that period of time. so what we've been able to show is that by winning customers and making them successful, allowing them to grow, that those customers become very profitable over time. and then we've acquired thousands and thousands of more customers since then. so we can show our long-term customer profitability is very appealing. but we believe the right thing for shareholders is to continue to rest in growth while at the same time continuing to show operating marnlgins. >> bob, i took your company public on the nasdaq back a couple of months ago. the stock is down 11% over the past month. >> so 2014 has been a really big year for mobile irons. we went public in june and we're
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still able to be reporting our second earnings as a public company. and if you look at the secular headwinds in the ender price software space and compare it with the russell 2000 index, we have significant significantly outperformed it. >> all right. bob, president and ceo of mobileiron, thanks for your time. u.s. markets are poised to raise all of october's losses. the futures point to go a strong open. the nikkei rallied to a seven-year high as the bank of japan unexpectedly boosts its program. and starbucks had disappointing streets on u.s. sales sending shares lower after hours.
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welcome back. let's give you an update on european market. as you can see, a lot of green to my right. san francisco up 1.8%. ftse up 1.8%. the xetra dax has some technical glirchs. they're currently looking into the problem, but we'll keep you up to date. the ftse 100 is up 1%. why are all these markets in the green? well, in part, led up by the positivity out of the u.s. the biggest mover in asia, comfortably, the nikkei which is up 4.83 pirs. why? because the bank of japan has turned on the tap again, unspec'dly. is that setting a precedent? next week, all eyes, of course, on thursday. that move has voided other markets across asia. hang seng is up 1.5%. australia up, the best part of 1%, as well.
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>> that bank of japan move adding fuel. futures higher across the board. what a roller coaster ride the month of october has been. if you take a look at how stocks have ended for the month of october, you'll see the dow, the s&p 500 and the nasdaq on track to close in the green for the month of october. the dow jones industrial up about 1%. the nasdaq up 1.6%. early tech names that have fueled the nasdaq this month. and the s&p 500 trading at 1,1 b 994. concerns about ebola, a global slowdown, those to the side as we look at number he coming out of the fed as well as better-than-expected earnings stocks. we also want to point out that the utility index is hitting a new high, it has been powering to new highs, benefiting from a drop in oil prices as well as
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better-than-expected earnings from a lot of the utility majors. let's bring in todd horwitz. let talk about the markets here, todd. do you think now that the fed has scaled back on monetary support, there is no quantitative easing? can the market continue to move higher without the fed support? >> good morning, seema. good morning, wilfred. if we look at the shinzo abe trick or treat on the bears and their rallying on the markets here, you know, the fed did slip away. the bond purchases are over. but everybody knows that they're standing right on the sidelines, waiting for just any problem. so if these markets are to show any weakness, although the qe program is over, they're sitting there waiting for the problems. you can see by what happens in japan, what may happen next week, this is a manipulation of
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the equity market. ite more ooh an act of desperation trying to make sure they keep the assets aflow. nebs on the vfrts look to be good, the actual numbers are not great. yes, they're building a lot of cash on their balance sheets. yes, they're showing something, but they still have not showing real growth. we are not seeing a tremendous amount of growth in the job markets. numbers are good, price is not good. >> what for you is the biggest factor leading to the rally in the markets? >> i think what you saw is you saw the sell-off in what we would call a blowup on wednesday, the 15th, then you had the fed come out and say, well, we may have more qe. and we're getting a big run up here based on everything. i have a joke for you gentlemen. what do you call a witch who lives at the beach? >> what? >> a sandwich. there's your halloween joke.
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i'm going to leave it there. u.s. futures higher. thanks for watching "worldwide exchange." opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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good morning. welcome back to "squawk box." october not so scary for the market after all. and in japan, they have just provided the world with a big treat. starbucks delivers result and soon it may be delivering coffee right to your desk. and all you earn morning ghouls, ghosts, zombies and walkers, it's time to wake up for some tricks and treats. it is halloween, it is penelope's birthday and it's friday, october 31st, 2014. "squawk box" begins right now.
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>> good morning, everybody. happy hallow week. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the fans of cleveland getting a treat last night with lebron james returning. but they got a trick at the end of the night. the big shot coming from carmelo antho anthony. james would only have 17 points on the night. i think they're still happy to have king james back in down. >> sure. would you sign -- if we could swing it with amc, would you sign on for this music every morning rather than the -- >> we have it 50% of the time? because it doesn't work when it's a happy day. >> it only works when the stock market is falling

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